Jeffrey Parchman v. SLM Corp. , 896 F.3d 728 ( 2018 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 18a0148p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
JEFFREY PARCHMAN and NANCY CARLIN, individually ┐
and on behalf of all others similarly situated, │
Plaintiffs-Appellants, │
> No. 17-5968
│
v. │
│
│
SLM CORPORATION; NAVIENT CORPORATION; │
NAVIENT SOLUTIONS, INC.; SALLIE MAE BANK, │
Defendants-Appellees. │
┘
Appeal from the United States District Court
for the Western District of Tennessee at Memphis.
No. 2:15-cv-02819—John Thomas Fowlkes, Jr., District Judge.
Argued: March 16, 2018
Decided and Filed: July 20, 2018
Before: BOGGS, CLAY, and LARSEN, Circuit Judges.
_________________
COUNSEL
ARGUED: Benjamin J. Miller, THE HIGGINS FIRM, PLLC, Nashville, Tennessee, for
Appellants. Lisa M. Simonetti, VEDDER PRICE (CA), LLP, Los Angeles, California, for
Appellees. ON BRIEF: Benjamin J. Miller, THE HIGGINS FIRM, PLLC, Nashville,
Tennessee, James A. Dunlap Jr., JAMES A. DUNLAP JR. & ASSOCIATES LLC, Atlanta,
Georgia, for Appellants. Lisa M. Simonetti, VEDDER PRICE (CA), LLP, Los Angeles,
California, Bryan K. Clark, VEDDER PRICE P.C., Chicago, Illinois, Odell Horton, Jr., WYATT
TARRANT & COMBS, Memphis, Tennessee, for Appellees.
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 2
_________________
OPINION
_________________
CLAY, Circuit Judge. Plaintiffs Jeffrey Parchman (“Parchman”) and Nancy Carlin
(“Carlin”), individually and on behalf of all others similarly situated, sued Defendants SLM
Corporation (“SLM”), Navient Corporation (“Navient”), Navient Solutions Inc. f/k/a Sallie Mae,
Inc. (“NSI”), and Sallie Mae Bank (“SMB”) for negligent and knowing/willful violations of the
Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. Plaintiffs appeal from the
judgment entered by the district court granting NSI’s motion to sever and to dismiss, and
denying Plaintiffs’ motion to amend the complaint. For the reasons set forth below, we
AFFIRM in part and REVERSE in part the judgment of the district court and REMAND for
proceedings consistent with this opinion.
BACKGROUND
This case arises out of alleged unauthorized autodialed and prerecorded message calls
from Defendants to Plaintiffs. Defendants were in the business of servicing student loans. On
December 22, 2015, Parchman, individually and on behalf of all others similarly situated, filed
suit against SLM, Navient, and NSI for violating the TCPA. The TCPA prohibits a party from
making a call “using any automatic telephone dialing system or an artificial or prerecorded
voice,” in the absence of an emergency or consent. 47 U.S.C. § 227(b)(1)(A). On March 30,
2016, Parchman amended his complaint to add Carlin as a plaintiff and SMB as a defendant.1
Plaintiffs allege that Defendants “negligently, knowingly and/or willfully contact[ed]
Plaintiffs on Plaintiffs’ cellular telephones without their prior express consent within the
meaning of the [TCPA].” (R. 27, Amended Complaint, PageID # 97.) With regard to Parchman,
Plaintiffs allege that Defendants repeatedly contacted him, even though he never gave them his
cell phone number, never owed any debt to any of the Defendants, and told them to stop calling
1Before May 1, 2014, NSI was known as Sallie Mae, Inc. (“SMI”). At that time, SLM, a holding company,
was the parent corporation of SMI and SMB. In 2014, SMI, SMB, and SLM engaged in transactions that terminated
the ownership relationship between SMI and SMB, and SMI and SLM. SMI changed its name to NSI. A new
parent company for NSI was created called Navient.
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 3
him. With regard to Carlin, Plaintiffs allege that, though Carlin took out a student loan in 2012,
Defendants repeatedly contacted her, even after she demanded in writing that they stop calling
her, starting on or about October 21, 2014. Plaintiffs brought the action on behalf of all other
persons similarly situated. They requested monetary and injunctive relief, attorney’s fees and
costs, and Rule 23 class certification.
On May 6, 2016, NSI filed a motion to sever and dismiss Carlin’s claims. NSI argued
that severing the actions was appropriate because the calls involved different companies and
their respective calling practices. NSI argued that dismissal was appropriate because the district
court lacked personal jurisdiction over NSI for Carlin’s claims.
On January 13, 2017, Plaintiffs filed a motion to amend the complaint. After Parchman
died on May 25, 2016, Plaintiffs sought to amend their complaint to substitute Parchman’s
daughter for Parchman and to add his mother as a plaintiff.2 On February 3, 2017, Defendants
filed a motion to preclude class certification and in opposition to Plaintiffs’ motion to amend. As
part of the motion to preclude class certification, Defendants argued that the requisite elements
of adequacy of class counsel and adequacy of class representatives were not met.
On July 18, 2017, the district court granted NSI’s motion to sever and dismiss for lack of
jurisdiction and denied Plaintiffs’ motion to amend. It did not rule on the motion to preclude
class certification. The district court granted the motion to sever Carlin’s claims because Carlin
was not called by the same company that called Parchman. The district court granted the motion
to dismiss Carlin’s claims against NSI because it lacked personal jurisdiction over those claims.
The court denied Plaintiffs’ motion to amend, reasoning that TCPA claims do not survive a
plaintiff’s death, TCPA claims may not be assigned, and Parchman’s daughter would not be a
2Plaintiffs’ counsel first notified Defendants’ counsel of Parchman’s death on January 4, 2017. With
regard to the delay in notifying the court of Parchman’s death, Plaintiffs’ counsel claim they learned that Parchman
died when they were trying to reach Parchman to arrange his deposition. SMB served a notice of deposition for
Parchman on December 15, 2016. Plaintiffs’ counsel claim that they “had been regularly giving Mr. Parchman
updates without any difficulty by telephone and email, but there was no reason to hear back from him until the
request for his deposition was made. No written discovery was ever sent to him and no settlement offers were ever
made to him individually.” (R. 68, Plaintiffs’ Status Report, PageID # 306.) Plaintiffs cite to email updates sent on
July 19, 2016, September 25, 2016, September 29, 2016, and November 10, 2016, and an email from Parchman on
May 17, 2016. They say “there was no reason for plaintiff counsel to be concerned when he did not respond to their
subsequent communication” and, until December 2016, “plaintiff[s’] counsel’s communications were always in the
nature of status updates only.” (R. 80, Plaintiffs’ Response, PageID # 409.)
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 4
proper class representative. Finally, the district court expressed its “deep concerns about
Plaintiffs’ counsel’s performance in this case” based on the delayed reporting of Parchman’s
death. (R. 91, Order, PageID # 679–78.)
On August 16, 2017, Plaintiffs filed a notice of appeal. On appeal, Plaintiffs ask that this
Court reverse the district court’s grant of NSI’s motion to sever and dismiss and the denial of
Plaintiffs’ motion to amend.
DISCUSSION
I. NSI’s Motion to Sever and Dismiss
A. Motion to Sever
Standard of Review
“We review the severance of joined claims for an abuse of discretion.” Payne v. Corr.
Corp. of Am., 194 F.3d 1313 (6th Cir. 1999) (unpublished table decision) (citing Michaels Bldg.
Co. v. Ameritrust Co., N.A., 848 F.2d 674, 682 (6th Cir. 1988)). “The permissive language of
Rule 21 permits the district court broad discretion in determining whether or not actions should
be severed.” Johnson v. Advanced Bionics, LLC, No. 2:08-CV-02376-JPM, 2011 WL 1323883,
at *6 (W.D. Tenn. Apr. 4, 2011) (alteration omitted) (quoting Alvion Properties, Inc. v. Weber,
No. 3:08–0866, 2009 WL 3060419, at *8 (M.D. Tenn. Sept. 23, 2009)).
Analysis
Rule 21 of the Federal Rules of Civil Procedure provides that “[t]he court may . . . sever
any claim against a party.” Courts consider a number of factors when determining whether to
sever claims, including:
(1) whether the claims arise out of the same transaction or occurrence;
(2) whether the claims present some common questions of law or fact;
(3) whether settlement of the claims or judicial economy would be facilitated;
(4) whether prejudice would be avoided if severance were granted; and
(5) whether different witnesses and documentary proof are required for separate
claims.
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 5
Productive MD, LLC v. Aetna Health, Inc., 969 F. Supp. 2d 901, 940 (M.D. Tenn. 2013)
(citation omitted).
Plaintiffs’ only argument on appeal is that the district court’s grant of NSI’s motion to
sever should be reversed because the district court “failed to provide an adequate explanation to
support the decision thereby making it impossible for this court to determine if the district court
abused its discretion.” (Plaintiffs’ Br. at 29.)
But the district court did explain itself and adequately justified its action. The district
court found that SMB made calls to Parchman but not to Carlin, that NSI made calls to Carlin
but not to Parchman, and that NSI had no corporate relationship to SMB when the calls were
made to Carlin in late 2014. The district court then concluded:
The factors to consider in deciding a motion to sever[] weigh in favor of severing
Carlin’s claims. There are no common questions of fact; the transactions or
occurrences at issue regarding the calls are not the same nor did they originate
from the same caller or company; the severed party would not be prejudiced; and
if the case proceeded to trial, different witnesses and documentary proof would be
required to prove these claims.
(R. 91, Opinion, PageID # 688.)
Plaintiffs try to argue that the district court failed to “explain why the transactions or
occurrences would not be the same, or why different witnesses and documentary proof would be
required.” (Plaintiffs’ Br. at 30.) But based on the court’s finding that Carlin was not called by
the same company that called Parchman, it is clear why the transactions or occurrences at issue
would not be the same, or why different witnesses and documentary proof would be required.
Consequently, the district court was within its discretion to sever Carlin’s claims.
B. Motion to Dismiss
Standard of Review
“We review de novo a district court’s dismissal of a complaint for lack of personal
jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure.” Gerber v.
Riordan, 649 F.3d 514, 517 (6th Cir. 2011) (quoting Bird v. Parsons, 289 F.3d 865, 871 (6th Cir.
2002)).
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 6
Analysis
Plaintiffs argue that the request to dismiss was “contingent on the success of the request
to sever” and “because the severance should be reversed[,] so should the dismissal.” (Plaintiffs’
Br. at 31.) But, as detailed above, the district court did not abuse its discretion in granting the
motion to sever.
Plaintiffs then argue that the dismissal should be reversed because NSI waived the
defense of lack of personal jurisdiction by “actively and extensively participat[ing]” in the case. 3
(Id.) More specifically, Plaintiffs argue that NSI waived the defense by: filing an answer to the
amended complaint, participating in written discovery, and “continu[ing] to seek relief from the
district court on various matters, including preclusion of class certification.” (Id. at 31–32.)
A defendant may waive the personal jurisdiction defense through conduct. King v.
Taylor, 694 F.3d 650, 659 (6th Cir. 2012). “In deciding whether [NSI] waived [its] personal
jurisdiction defense, we must determine whether any of [NSI’s] appearances and filings in the
district court constituted legal submission to the jurisdiction of the court.” Gerber, 649 F.3d at
519 (citation and internal quotation marks omitted). “[T]he voluntary use of certain district court
procedures serve[s] as constructive consent to the personal jurisdiction of the district court . . . .”
Id. (citation, internal quotation marks, and alterations omitted). “Only those submissions,
appearances and filings that give Plaintiff a reasonable expectation that [NSI] will defend the suit
on the merits or must cause the court to go to some effort that would be wasted if personal
jurisdiction is later found lacking, result in waiver of a personal jurisdiction defense.” Id.(citation, internal quotation marks, and alterations omitted). “We consider all of the relevant
circumstances.” King, 694 F.3d at 659 (citing Hamilton v. Atlas Turner, Inc., 197 F.3d 58, 61
(6th Cir. 1999). The personal jurisdiction defense is not waived when a party makes a special
appearance in order to contest personal jurisdiction. Gerber, 649 F.3d at 520.
3Plaintiffs do not argue that there was an error in the district court’s personal jurisdiction analysis. Because
Plaintiffs do not make this argument, we will not consider it on appeal. See United States v. Johnson, 440 F.3d 832,
845–46 (6th Cir. 2006) (“An appellant abandons all issues not raised and argued in its initial brief on appeal.”
(citation and alteration omitted)).
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 7
The submissions, appearances, and filings cited by Plaintiffs did not constitute waiver of
the personal jurisdiction defense. First, Plaintiffs point to NSI’s answer to the amended
complaint. But NSI’s answer responded only to Parchman’s claims. It specifically stated:
“[t]hroughout this Answer, NSI responds to the allegations for itself only and for no other
defendant, and only as to the allegations made by Parchman.” (R 41, Answer, PageID # 169.)
NSI did not respond to Carlin’s claims in the answer, and did not file a separate answer
responding to Carlin’s claims. Instead, NSI made a special appearance in order to contest
personal jurisdiction by filing a motion to sever and dismiss. This is consistent with NSI’s
position that the court had personal jurisdiction over Parchman’s claims against it, but not
Carlin’s claims. NSI’s answer responding only to Parchman’s claims and not Carlin’s claims did
not constitute “legal submission to the jurisdiction of the court.” Gerber, 649 F.3d at 520(citation omitted).
Plaintiffs next argue that NSI participated in written discovery. Plaintiffs cite NSI’s
Responses to Parchman’s First Set of Interrogatories and NSI’s Responses to Parchman’s First
Set of Requests for Production. But again these responses dealt only with Parchman’s claims
against NSI, and not Carlin’s claims against NSI. Plaintiffs also cite NSI’s Responses to Carlin’s
Interrogatories and NSI’s Responses to Carlin’s Requests for Production. But both of these
documents were called “Responses of Specially Appearing Defendant [NSI]” and both included
a “Preliminary Statement” that said “NSI states that this Court lacks personal jurisdiction over
NSI with respect to the claims made by Carlin. NSI’s responses to the Requests shall not be
construed as a waiver of any objection to the Court’s jurisdiction.” (R. 80-8, PageID # 438;
R. 80-9, PageID # 447.) In these two responses, NSI did not provide any substantive information
and objected to the interrogatories and requests for production on a number of grounds including
that “this Court lacks personal jurisdiction over NSI with respect to claims made by Carlin.”
(R. 80-8, PageID # 438–44; R. 80-9, PageID # 447–454.) These discovery responses did not
give Plaintiffs “a reasonable expectation that [NSI] w[ould] defend the suit on the merits”
because NSI consistently asserted its personal jurisdiction challenge as a specially appearing
defendant and provided no information in response to Carlin’s requests. Gerber, 649 F.3d at
520.
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 8
Finally, Plaintiffs point to a stipulation to amend a scheduling order, a joint motion to
continue, and a joint motion to preclude class certification. The stipulated motion for extension
of certain scheduling order deadlines was filed by Plaintiffs and joined by counsel for
Defendants. The joint motion to continue deadlines and status conference was also filed by
Plaintiffs and joined by counsel for Defendants. These two motions do not distinguish the claims
brought against NSI by Parchman or by Carlin, but nothing in them indicates that NSI had
switched the position that it had maintained throughout the litigation and would begin defending
Carlin’s claims. Finally, SMB filed a combined motion to preclude class certification that was
joined by all Defendants. This motion “dealt with, and arose from, counsel’s conduct with
respect to J. Parchman, and the impact on his claim.” (Defendants’ Br. at 41.) The motion
barely mentions Carlin at all, and only does so to reference the pending motion to sever and
dismiss for lack of personal jurisdiction. Again, this motion represents another instance in which
NSI took action on the claims by Parchman, while asserting the personal jurisdiction defense as
to the claims by Carlin.
In sum, the submissions, appearances, and filings detailed above did not give Plaintiffs a
reasonable expectation that NSI would defend Carlin’s claims on the merits and did not require
the district court to “go to some effort that would be wasted if personal jurisdiction is later found
lacking.” Gerber, 649 at 520. NSI did not waive its personal jurisdiction defense.
The district court did not err in granting NSI’s motion to sever and dismiss Carlin’s
claims against NSI. Accordingly, we AFFIRM the district court’s grant of these motions.
II. Plaintiffs’ Motion to Amend the Complaint
Standard of Review
“[T]his Court reviews the denial of a motion to amend under the abuse-of-discretion
standard, unless the motion was denied because the amended pleading would not withstand a
motion to dismiss, in which case the standard of review is de novo.” Beydoun v. Sessions,
871 F.3d 459, 464 (6th Cir. 2017) (citation, internal quotation marks, and alteration omitted).
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 9
The district court’s denial of leave to add Parchman’s mother as a plaintiff with
independent claims should be reviewed for abuse of discretion. The district court’s denial of
leave to substitute Parchman’s daughter for Parchman was based on the futility of such an
amendment and should be reviewed de novo.
Analysis
Plaintiffs sought to amend their complaint to add Parchman’s daughter and mother as
additional plaintiffs. Plaintiffs argued that the daughter was Parchman’s successor in interest and
that his mother had her own independent claim based on the same facts alleged in the amended
complaint. Apparently, Parchman and his mother shared the cell phone that received the calls
from Defendants, and the mother received some of those calls herself. Plaintiffs noted that
Parchman’s mother could file her own separate lawsuit, but argued the interests of judicial
economy would be served by consolidating the actions given the similar issues of law and fact.
We consider first the denial of the motion to amend to add the claims of Parchman’s
mother, and then the denial of the motion to amend to substitute Parchman’s daughter as
plaintiff.
A. Parchman’s Mother
Leave to amend should be “freely” granted “when justice so requires.” Fed. R. Civ. P.
15(a)(2). “In the absence of any apparent or declared reason—such as undue delay, bad faith or
dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by virtue of allowance of the
amendment, futility of amendment, etc.—the leave sought should, as the rules require, be ‘freely
given.’” Foman v. Davis, 371 U.S. 178, 182 (1962). “[I]t should be emphasized that the case
law in this Circuit manifests ‘liberality in allowing amendments to a complaint.’” Newberry v.
Silverman, 789 F.3d 636, 645 (6th Cir. 2015) (quoting Janikowski v. Bendix Corp., 823 F.2d 945,
951 (6th Cir. 1987)).
While “the grant or denial of an opportunity to amend is within the discretion of the
District Court,” “outright refusal to grant the leave without any justifying reason appearing for
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 10
the denial is not an exercise of discretion,” but “abuse of that discretion and inconsistent with the
spirit of the Federal Rules.” Foman, 371 U.S. at 182. This Court has held that the denial of a
motion to amend without explanation or justification is an abuse of discretion, Rose v. Hartford
Underwriters Ins. Co., 203 F.3d 417, 420 (6th Cir. 2000), unless the reason for the denial of a
motion to amend is “readily apparent, particularly in view of the liberal position of the federal
rules on granting amendments.” FDIC v. Bates, 42 F.3d 369, 373 (6th Cir. 1994) (quoting
Dussouy v. Gulf Coast Inv. Corp., 660 F.2d 594, 597 (5th Cir. 1981)).
The district court did not provide a reason for the denial of Plaintiffs’ motion to add
Parchman’s mother. When considering Plaintiffs’ motion to amend, the district court referenced
the mother initially—“Counsel seeks to add Jeffery Parchman’s mother and daughter as
successors in interest, due to his untimely death”—but then discussed the reasons Parchman’s
daughter could not be substituted for Parchman and ultimately denied “Plaintiff’s Motions to
Amend the Complaint to substitute Jeffrey Parchman’s daughter as class representative.” (R. 91,
Opinion, PageID # 688–92.) The district court did not explicitly deny Plaintiffs’ motion to
amend the complaint to add the claims of Parchman’s mother. Furthermore, as explained in
more detail below, the reasoning that supports the denial of the motion to add Parchman’s
daughter does not apply to the denial of the motion to add Parchman’s mother because the
mother asserts her own independent claims against Defendants.
The question becomes whether the reason for the denial is readily apparent. The district
court mentioned the mother when discussing the court’s concerns about counsel’s performance
and the adequacy of class counsel—a topic entirely separate from the motion to amend. The
district court said:
Also of concern is Counsel’s representation that Parchman’s mother shared the
phone with Parchman and has her own claims, but never joined in this proceeding
prior to her son’s death. Despite her so-called sharing the phone and having her
own claims, Ann Parchman was apparently not involved in this matter. Had she
been, she would have notified counsel of her son’s death soon after it occurred.
(R. 91, Opinion, PageID # 680.)
Despite Defendants’ suggestion that “the Court’s concern appears rooted in the
significant delay in moving to add J. Parchman’s mother as a party and counsel’s bad faith in
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 11
doing so at this stage,” (Defendants’ Br. at 28–29), we do not read this language as providing a
basis to deny the motion to amend for undue delay and bad faith. The three sentences expressing
concern that the mother did not join the proceeding prior to her son’s death do not necessarily
indicate that the district court thought there was undue delay or bad faith warranting the denial of
the motion. This language appears in an entirely different and unrelated section about the
performance of counsel. The lack of mention of the mother’s claim within the section
specifically addressing the motion to amend could mean that the district court simply forgot
about the issue. Also, with regard to bad faith, even if Plaintiffs’ counsel did have a duty to
disclose the “fact of death to a tribunal,” it is not clear that counsel acted in bad faith, especially
where Plaintiffs’ counsel had been sending Parchman email updates and leaving voicemails.
(R. 68, Status Report, PageID # 306; R. 80, Response, PageID # 409.) See supra footnote 2.
And if the district court wanted to deny the motion based on undue delay, “at least some
significant showing of prejudice” would be required, and the district court did not discuss any
prejudice to Defendants by adding a plaintiff at this stage of the proceedings. Prater v. Ohio
Educ. Ass’n, 505 F.3d 437, 445 (6th Cir. 2007) (citation omitted).
Because we cannot discern from the text of the opinion the reason for the district court’s
denial of the motion with regard to Parchman’s mother, we REVERSE the district court’s order
denying Plaintiffs’ motion for leave to amend and REMAND for the district court’s
consideration.
B. Parchman’s Daughter
As explained above, leave to amend should be “freely” granted “when justice so
requires.” Fed. R. Civ. P. 15(a)(2). One reason to deny leave is futility of amendment. Foman,
371 U.S. at 182. “A proposed amendment is futile if the amendment could not withstand a Rule
12(b)(6) motion to dismiss.” Beydoun, 871 F.3d at 469 (quoting Riverview Health Inst. LLC v.
Med. Mut. of Ohio, 601 F.3d 505, 512 (6th Cir. 2010)).
The district court provided three reasons for denying the substitution of Parchman’s
daughter. First, the district court said that the TCPA was penal in nature and therefore found that
an action under the TCPA did not survive Parchman’s death. Second, the district court said that
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a TCPA claim “constitutes a right of privacy action,” which is a personal right that “may not be
assigned to another” or “asserted by a member of the individual’s family, even if brought after
the death of the individual.” (R. 91, Opinion, PageID # 691.) Finally, the district court said that
Parchman’s daughter would not be a proper representative of the class because she lacked
standing due to “her lack of injury in fact,” because there was no allegation that “she received a
call or was ever the intended recipient of any of the calls from these Defendants.” (Id. at # 691.)
The district court denied the motion to “Amend the Complaint to substitute Jeffrey Parchman’s
daughter as class representative.” (Id. at # 692.)
We first consider whether a claim under the TCPA survives a plaintiff’s death. “The
question of survivability . . . [is] [a] matter[] of federal law.” Murphy v. Household Fin. Corp.,
560 F.2d 206, 208 (6th Cir. 1977) (citing Bowles v. Farmers Nat’l Bank of Lebanon, Ky.,
147 F.2d 425, 430 (6th Cir. 1945)). The TCPA does not contain an expression of Congressional
intent regarding survival. “In the absence of an expression of contrary intent, the survival of a
federal cause of action is a question of federal common law.” United States v. NEC Corp.,
11 F.3d 136, 137 (11th Cir. 1993), as amended (Jan. 12, 1994) (citing James v. Home Constr.
Co. of Mobile, 621 F.2d 727, 729 (5th Cir. 1980)). Under the “federal common-law rule for the
survivability of statutory causes of action,” ‘“remedial’ claims—i.e., claims to compensate the
plaintiff—survive a party’s death, whereas ‘punitive’ claims—i.e., claims to punish the
defendant—do not.” Haggard v. Stevens, 683 F.3d 714, 717 (6th Cir. 2012) (citing Murphy,
560 F.2d at 208–09, 211). To determine whether a statute is penal or remedial, courts examine
three factors: “1) whether the purpose of the statute was to redress individual wrongs or more
general wrongs to the public; 2) whether recovery under the statute runs to the harmed individual
or to the public; and 3) whether the recovery authorized by the statute is wholly disproportionate
to the harm suffered.” Murphy, 560 F.2d at 209; Cook v. Hairston, 948 F.2d 1288 (6th Cir.
1991) (unpublished table decision).
The survivability of a private action under the TCPA is a matter of first impression for
the Courts of Appeals. The only court to squarely address the question is the Western District of
New York in Hannabury v. Hilton Grand Vacations Co., LLC, 174 F. Supp. 3d 768, 771–76
(W.D.N.Y. 2016). That court concluded that because the TCPA was penal in nature, TCPA
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claims “abate upon the Plaintiffs death.” Id. at 776. The district court followed the Hannabury
court precisely. But because we disagree with the Hannabury court’s analysis and conclusion,
we conduct the three factor analysis anew.
Turning to the first factor, the primary purpose of the TCPA was to protect individuals
from the harassment, invasion of privacy, inconvenience, nuisance, and other harms associated
with unsolicited, automated calls.4 The Congressional findings focus on exactly these kinds of
individual wrongs. Telephone Consumer Protection Act of 1991, Pub. L. 102–243, §2, 105 Stat.
2394 (1991). For instance, Congress found that “[m]any consumers are outraged over the
proliferation of intrusive, nuisance calls to their homes from telemarketers,” that “[u]nrestricted
telemarketing . . . can be an intrusive invasion of privacy,” that “residential telephone subscribers
consider automated or prerecorded telephone calls, regardless of the content or the initiator of the
message, to be a nuisance and an invasion of privacy,” and that “[t]echnologies that might allow
consumers to avoid receiving such calls are not universally available, are costly, are unlikely to
be enforced, or place an inordinate burden on the consumer.” Id. The findings are mostly
concerned with individual consumers and protecting them from the nuisance and invasion of
privacy that result from unwelcome automated telephone calls. In other contexts, courts have
also described the purpose of the TCPA as protecting consumers from the harms caused by these
unsolicited phone calls. See Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037, 1043 (9th
Cir. 2017) (“Congress sought to protect consumers from the unwanted intrusion and nuisance of
unsolicited telemarketing phone calls and fax advertisements.”); Physicians Healthsource, Inc. v.
Boehringer Ingelheim Pharm., Inc., 847 F.3d 92, 99 (2d Cir. 2017) (“Congress undertook to
4It would be a mistake to limit our view of the harms associated with a violation of the TCPA to only actual
monetary damages, because the harm from these calls is not so limited. See Am. Copper & Brass, Inc. v. Lake City
Indus. Prods., Inc., 757 F.3d 540, 544 (6th Cir. 2014) (finding that unsolicited faxes under the TCPA “impose costs
on all recipients, irrespective of ownership and the cost of paper and ink, because such advertisements waste the
recipients’ time and impede the free flow of commerce”); Murphy, 560 F.2d at 210 (finding the Truth in Lending
Act remedial even though consumers would “have difficulty demonstrating the precise dollar amount of their
injuries”); NEC Corp., 11 F.3d at 137–38 (finding that a qui tam relator under the False Claims Act “suffers
substantial harm and the qui tam provisions of the FCA are intended to remedy that harm,” and referencing harms,
including “emotional strain due to the discovery of his unwilling involvement in fraudulent activity,” potential
ramifications to his employment, and having to face the choice of keeping quiet or reporting the fraud); Standard
Mut. Ins. Co. v. Lay, 989 N.E.2d 591, 599–600 (Ill. 2013) (stating that Congress identified “loss of paper and ink,
annoyance and inconvenience” as harms that the TCPA is meant to redress by prohibiting unsolicited faxes). The
Hannabury court made this mistake. 174 F. Supp. 3d at 776.
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 14
limit the use in commerce of certain methods of communication that impose costs, hardships,
and annoyances on unwilling recipients.”).
That the harm is widely shared does not mean it is a general public wrong. These are
harms felt by identifiable individuals, as individuals. They are not harms felt by the general
public, as a community. That the TCPA can also be described as attempting to deter socially
undesirable calling practices is not problematic as it was primarily designed to remedy individual
wrongs. See Murphy, 560 F.2d at 211 (“The Truth in Lending Act ultimately serves the dual
purpose of providing a remedy for harm to the monetary interests of individuals while serving to
deter socially undesirable lending practices. Congress focused on the individual consumer of
credit as the person primarily injured who should be encouraged to prosecute actions and should
be allowed to recover directly and adequately for harms done. This is not the sort of statutory
scheme properly characterized as penal.”); see also James, 621 F.2d at 730 (noting that the Truth
in Lending Act is designed to “redress both individual wrongs and wrongs to the public, in the
sense of redressing a broad social problem,” but concluding that the primary purpose of the act is
to redress wrongs to the individual consumer); FTC v. Capital City Mortg. Corp., 321 F. Supp.
2d 16, 22 (D.D.C. 2004) (“While the overall enforcement of the [Equal Credit Opportunity Act]
may deter discrimination-based lending practices, the Act was clearly intended to protect
individual consumers from discriminatory credit practices.”). In all, we think that the purpose of
the TCPA was to redress individual wrongs felt by individual consumers. Consequently, this
first factor suggests that the TCPA is remedial.
As to the second factor, recovery under the statute runs to the harmed individual and not
the public, suggesting TCPA claims are remedial.
As to the third factor, the TCPA provides for the recovery of “actual monetary loss
from . . . a violation, or . . . $500 in damages for each such violation, whichever is greater.”
47 U.S.C. §§ 227(b)(3)(B), (c)(5)(B). In addition, “the court may, in its discretion, increase the
amount of the award to an amount equal to not more than 3 times the amount under
subparagraph (B)” if the court finds a willful or knowing violation of the TCPA. Id.§§ 227(b)(3), (c)(5). We cannot say that $500 is wholly disproportionate to the harm suffered as
a result of receiving these irritating and invasive calls, especially where the harm is hard to
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 15
quantify and may vary significantly from person to person. However, the treble damages
provision is more likely disproportionate because it gives the court discretion to increase
damages that, at $500 per call, are already greater than actual damages in most cases. This
factor, then, leans at least in part toward finding that TCPA claims are penal.
But the TCPA should not be found to be penal merely because one remedy authorized by
the statute may be disproportionate to the harm suffered. “[T]he Supreme Court, this court and
the courts of numerous other circuits have held a number of statutory schemes authorizing
multiple recoveries and minimum recoveries greater than actual damages to be remedial.”
Murphy, 560 F.2d at 210. Murphy itself found the Truth in Lending Act was “not made penal by
the fact that” it allowed actual damages plus “twice the finance charge.” Id. at 210. The RICO
statute has also been found to be a remedial statute even though it provides that an injured person
“shall recover threefold the damages he sustain[ed].” 18 U.S.C. § 1964(c); see Malvino v.
Delluniversita, 840 F.3d 223, 230 (5th Cir. 2016); Faircloth v. Finesod, 938 F.2d 513, 518 (4th
Cir. 1991). Courts have also found the antitrust statute, which provides for damages identical to
those allowed by the RICO statute, to be remedial. 15 U.S.C. § 15(a); see, e.g., Hicks v. Bekins
Moving Storage Co., 87 F.2d 583, 585 (9th Cir. 1937).
The TCPA differs from these statutes in three ways, which point in competing directions
in determining whether the TCPA is penal or remedial. First, the multiple recovery provision of
the TCPA is triggered only when the defendant acts willfully or knowingly. Second, the TCPA
permits the court to treble statutory damages of $500 per call, while the other provisions allow
the multiple recovery of actual damages or actual finance charges. These differences suggest
that the TCPA may be comparatively more penal. But, importantly, the TCPA gives the court
discretion to decide in each case whether and how much to increase damages, unlike the
provisions in the other statutes which automatically provide multiple recovery. This allows the
court to evaluate the facts of a particular case and, perhaps, the harm caused to the plaintiff by
the defendant’s violations in determining the appropriate level of damages. This difference
suggests that the TCPA is comparatively more remedial.
In all, then, we think that claims under the TCPA are best characterized as remedial.
“The fact that the statute allows for accumulated recovery does not convert an otherwise
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 16
remedial statutory scheme into a penal one.” Murphy, 560 F.2d at 210 (citing Huntington v.
Attrill, 146 U.S. 657, 667–68 (1892)). As a result, claims under the TCPA do survive a
plaintiff’s death. Accordingly, we REVERSE the district court’s holding regarding the
survivability of Parchman’s TCPA claims.
The district court offered two reasons that it believed supported its decision to deny the
motion to amend.5 First, the district court incorrectly looked to Tennessee privacy and
assignability law to support its decision that a TCPA claim does not survive a plaintiff’s death.
The district court noted that a TCPA claim is a privacy violation. It cited a Sixth Circuit case
which “determined that the 31 prerecorded telemarketing calls in violation of the TCPA were
also violations of his privacy under Ohio law.” (R. 91, Opinion, PageID # 691 (citing Charvat v.
NMP, LCC, 656 F.3d 440, 454 (6th Cir. 2011).) It then said, “[s]imilar to Ohio, Tennessee law
also holds a party liable for unreasonable intrusion and the resulting harm therefrom.” (Id.
(citing West, 53 S.W.3d at 643).) It then said that a violation of the right to be let alone is an
invasion of privacy action in Tennessee, which is a personal right that may not be assigned to
another or asserted by a member of the individual’s family, even after death. But that an
invasion of privacy action is a personal right that may not be assigned in Tennessee says
absolutely nothing about the TCPA and whether that federal claim survives death or can be
assigned.6 The district court provided no reason why this Court should look to the Tennessee
law of assignability in order to determine whether a federal claim under the TCPA survives the
plaintiff’s death. The cases cited by the district court do not stand for the proposition that a
federal TCPA claim should be subject to the state law of invasion of privacy actions or of
assignability. The TCPA is a federal claim and federal law “specifies the substantive rules of
decision.” Mims v. Arrow Fin. Servs., LLC, 565 U.S. 368, 387 (2012). The question of survival
5The district court stated its holding succinctly in its conclusion: “After a complete review of the
record, . . . the Court finds that the TCPA action does not survive the death of the named Plaintiff Jeff[re]y
Parchman, and therefore Plaintiff’s Motion to Amend the Complaint . . . should be Denied.” (R. 91, Order, Page ID
# 692.)
6The district court was not precise in distinguishing between survivability and assignability, as evidenced
by the fact that it said that “the holding in Hannabury” was “that once the named party to a TCPA [suit] dies, the
claims are not assignable.” (R. 91 at 23, PageID 691.)
No. 17-5968 Parchman, et al. v. SLM Corp., et al. Page 17
of a federal claim is a matter of federal law. Murphy, 560 F.2d at 208. Tennessee law is
irrelevant and has no bearing on this Court’s interpretation of a TCPA claim.
Finally, the district court stated that Parchman’s daughter would not be a proper
representative of the class because she did not suffer any injury since she was never a recipient
of the calls.7 But the question of whether Parchman’s daughter would be an adequate class
representative under Rule 23 is different than the question of whether the complaint can be
amended to substitute her. And to the extent the district court’s conclusion was based on a
finding that the daughter lacked standing because she had not suffered an injury, we think that
resulted from and is inextricably intertwined with its earlier conclusion that Parchman’s TCPA
claim did not survive Parchman’s death.8 But, as already discussed, a TCPA claim does survive
death. Therefore, the district court’s statement was not pertinent to whether the daughter could
be substituted for Parchman on his individual, rather than class, claims.
Consequently, we REMAND for the district court to reconsider the motion to amend the
complaint to substitute Parchman’s daughter for Parchman. We leave it to the district court’s
determination on remand whether it is necessary to address the issue of who has the survivor’s
rights in this case.
CONCLUSION
Based on the foregoing, we AFFIRM in part and REVERSE in part the judgment of
the district court and REMAND for proceedings consistent with this opinion.
7As an aside, it seems strange that the district court considered this argument. The argument was made as
part of Defendants’ motion to preclude class certification under FRCP Rule 23. But the district court did not rule on
this motion in its opinion. Also, Plaintiffs objected to that motion on the ground that it was premature because the
daughter was not yet even a party to the action. Because of their objection, the Plaintiffs did not otherwise brief or
argue that the daughter would be an adequate class representative. The district court, then, concluded that the
daughter would not be an adequate representative without the benefit of full briefing.
8Indeed, had the district court found that a TCPA claim did survive death and that the daughter could step
into her father’s shoes, it would have been strange for it to then have concluded that she did not have standing, even
though her father did. As the substituted party, the daughter would not be asserting her own claim or seeking
vindication of her own injury; instead, she would be asserting her father’s claim on his behalf.